Landlords will need to pay stamp duty of 5% when purchasing additional properties, a move the NRLA believes will only exacerbate the housing supply crisis.
Rachael Reeves made the announcement in yesterday’s Budget (Oct 30) with the change to come in immediately.
This will come as a blow to those landlords out there planning to invest – something we need to happen if we are to provide the homes to let that the country so desperately needs.
Latest figures from property portal Zoopla show there are now 21 people are chasing every rental property – shocking figures that the tax hike will do nothing to tackle.
Indeed analysis for the NRLA by Capital Economics found that increasing stamp duty on rental properties from three to five per cent will see a net loss of half a million homes to rent over the next decade – a sobering statistic.
We also share the concerns of the Institute for Fiscal Studies, which pointed out earlier this year that higher taxes on the rental market only leads to rents going up.
In short, this change will only lead to fewer options for tenants when it comes to choosing a home and higher rents once they have found one.
However, I have to say, it’s not all doom and gloom and – looking at the overall picture –things could have been much worse.
With all the rumours swirling ahead of time as regards potential increases to Capital Gains Tax it was a relief to see that rates on residential property frozen at current levels.
While Capital Gains Tax was increased overall, the change simply renewed the old status quo, removing the distinction between asset classes.
And although the stamp duty change is not good news when it comes to encouraging investment – something we need if we are to tackle supply issues within the private rented sector – it is clear the other changes would have more of an impact.
In simple terms, while the stamp duty hike will hit you if you plan to buy more homes, it will not affect your existing portfolio in the way other tax changes could have done.
There was other positive news when it comes to housing, with the chancellor also confirming plans to:
- allow local authorities to retain the full receipts of right to buy schemes to reinvest in new housing.
- hire hundreds of new planning officers ‘to get Britain building again’
- invest £1 billion in removing dangerous cladding over next year.
Member webinar
If you would like to find out more about the budget and what it means for you, why not join ourexclusive member webinaron Friday (1 November). The event will offer you an in-depth analysis of all the key announcements and how they are likely to affect your business and the wider sector.
The event, ‘What the Budget means for the private rented sector’ will be hosted by the NRLA’s policy and campaigns team, with Sheena Parker from Wealth Management Limited joining the webinar as a guest speaker.
The webinar will run from 12pm-12.45pm and will be held on Zoom.?
To reserve your place?click here,?and if you would like to ask a question, please submit it in advance by emailing the campaigns and public affairs team at?campaigns@nrla.org.uk.?
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About the author
Ben Beadle is chief executive of the National Residential Landlords Association (NRLA), the UK’s largest trade body for landlords.
A landlord himself since the age of 20, Ben started out as property manager before working his way up through the ranks at the Tenancy Deposit Scheme.
He was then Operations Director at property management business Touchstone before overseeing the merger of the National Residential Landlords Association (NLA) and Residential Landlords Association (RLA) to create the new trade body earlier this year.
His key aims as head of the organisation are to strengthen the voice of landlords in Westminster and Cardiff, to improve the reputation of landlords in the media and to support members through information, training and accreditation.
NRLA: The NRLA updates landlords on all the latest legislation changes affecting the sector and offers expert advice, training and other exclusive services and benefits.
The views expressed in this content are solely those of the author alone and do not necessarily represent the views of TDS, its officers, or employees. To read more on TDS views, visit our Policies & Procedures webpage.
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